Why Your Business Should Consider ERP Solutions for Supply Chain Management?
Streamlining supply chain management is integral to enhancing productivity, and many organisations are adopting Enterprise Resource Planning (ERP) software as a way to achieve this goal.
What is Supply Chain Management?
Supply chain management (SCM) is essentially the management of all activities related to the supply chain – sourcing, designing, manufacturing, storing, packaging, transporting, and so on – from point of origin to point of purchase, effectively to enhance customer value. By actively managing every aspect of the supply chain, you are better positioning yourself to gain a competitive edge by ensuring everything runs smoothly and productivity is boosted. One way companies are enhancing supply chain management is through the application of Enterprise Resource Planning (ERP) software.
What is ERP?
A vital tool for an effectively-run supply chain is an information system that coordinates these activities. Enterprise Resource Planning (ERP) software is one of the most popular supply chain management solutions available. ERP effectively manages all business information, integrates the various systems and ensures efficiency from start to finish. The ERP solution adds value to the supply chain system by overseeing the physical aspects of the supply chain, as well as coordinating information from material procurement to product delivery. Everything from taking customer orders and scheduling operations to recording inventory and financial data is integrated by an ERP system, benefitting overall business performance. The two concepts are similar but in another article, we explain the differences between ERP vs SCM.
The role of ERP in Supply Chain Management
The fully-integrated ERP software will positively impact several aspects related to supply chain management within any business. Some of the roles of ERP software include:
- Job scheduling and planning: ERP systems in supply chain management can automatically generate orders when received and schedule jobs which assists in planning for product deliveries. ERP will also ensure the inventory is replenished when needed and production policies are in line with the demand.
- Managing procurement: ERP systems can take care of everything from handling warehouse resources to transportation and delivery. Communication with vendors can also be automated through an ERP solution.
- Maintaining records and updating orders: ERP software can create a bill of material for all items, record resources and shipping documents and update with any last-minute changes. This eliminates any ‘human error’ for faster production.
- Packaging and invoicing: ERP systems can assist in packaging methods and quality checks, as well as maintaining data for customer shipments and sending out invoices.
Benefits of ERP for your business
If you’re looking for an effective supply chain management solution for your business, then ERP is undoubtedly a great option. Here are some of the reasons how ERP software can benefit your business:
- Streamlining: By automating your business processes, you can centralise all of your data and monitor your day-to-day options in real-time.
- Supply chain optimisation: A benefit of the aforementioned streamlining is the overview of your supply chain. You can pick up areas where the supply chain can be improved quickly.
- Consolidation: With an ERP solution, you only need one system to operate various departments, which again, enhances the flow of your systems.
- Transparency: The ERP solution allows you to trace stock as well as any defected batches which allows for preventative maintenance. This is important in intensely-regulated industries.
- Flexibility: No business owner can accurately project business growth, but with an ERP system, that’s not an issue. As the business grows, the system will adapt to cater for changing needs.
- Mobility: Through cloud-based ERP or mobile ERP, you can monitor your supply chain system from wherever you are located. No need for on-site checks.
- Specification: You can opt for an industry-built ERP solution that is specified to the needs of your industry. This allows you to update according to industry requirements, keeping you competitive.
- Real-time data analysis: Rather than having to wait for an analysis of your business, you have access to real-time reports using ERP data analysis. This means you can make quick, informed business decisions.
- Enhanced customer relations: Effective supply chain management requires meeting consumers’ needs. With an ERP solution, you have more accurate information, a lower chance of error, and on-time delivery leaving customers satisfied.
- Boost the bottom line: All the aforementioned benefits of ERP solutions result in one thing – a healthier profit. By lowering your administrative and operational costs, minimising error, and reducing waste, you are going to see improved productivity overall.
What to consider when choosing an ERP provider
There are numerous ERP software options available and several providers who can assist with implementation in anything from a small enterprise to big corporates. Choosing the right ERP provider takes some consideration, so here are a few things to query:
- Past clients: An experienced company will be able to supply you with examples of satisfied clients and boasts a strong track record in the industry.
- Specialisation: ERP solutions differ from one industry to the next so you need to check that the provider is a specialist within your particular industry.
- Support and training: The provision of ERP solutions requires ongoing training and support. Your ERP provider should be able to offer training in the ERP software used by all employees, as well as being on-hand to assist if there is a query – particularly in the early stages.
- Follow-up training: Software will continue to update and, if your staff is not kept abreast of new features or reminded of how they could be optimising the existing ERP solution, you are not getting your money’s worth. The supplier must keep you abreast of any new information and be willing to give a refresher if needed.
- Flexibility: The Internet of Things (IoT) and Artificial Intelligence (AI) are going to develop – quickly – which means your ERP provider must be able to adapt and ensure your ERP solution constantly embraces emerging technologies.
Businesses that are looking to remain relevant in an increasingly digitised world cannot overlook the inherent advantages of ERP software to supply chain management. The benefits related to automation, integration, and improved efficiency are prompting the move towards ERP solutions. Just remember some form of customisation might be needed to ensure the ERP software is suited to your unique business needs.